WHAT TO WEAR? The question puzzles W many people shaken out of their routines by the pandemic. It also troubles investors. The world is full of "dirty shirts", as Bill Gross, a legendary bond trader, once put it, when contemplating the bonds on offer from heavily indebted governments. But you have to wear something. Thus many investors buy Treasuries, despite America's less-than-sparkling public finances, because it is the "least dirty shirt". The grubbiest garments are found elsewhere-among the world's emerging markets. They collectively owe $17trn of government debt, 24% of the global total. Eighteen of them have had their credit ratings cut in 2020 so far by Fitch, more than in the whole of any previous year. Argentina has missed a $500m payment on its foreign bonds. If it cannot persuade creditors to swap their securities for less generous ones by May 22nd, it will be in default for the ninth time in its history. The laundry pile also includes Ecuador, which has postponed $8oom of bond payments for four months to help it cope with the pandemic; Lebanon, which defaulted on a $1.2bn bond in March; and Venezuela, which owes bar-relfuls of cash (and crude oil) to its bondholders, bankers and geopolitical benefactors in China and Russia. These defaulters may soon be joined by Zambia, which is seeking to hire advisers for a "liability-management exercise", an agreement to pay creditors somewhat less, somewhat later than it promised (see Middle East and Africa section).
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